Reconciliation

1) I'm always amused by writers who use violently descriptive language like "taken a beating" to describe a situation in which people who agree with them have disagreed with someone else. Of course, a more accurate description would be "Ezra ripped open their stomachs and fed them their innards over the course of those blog posts arguing for Social Security to be funded in part out of general revenues!"

Early on in the foreclosure crisis, Dean Baker advanced the idea of allowing homeowners to switch to a long-term rental program. In other words, they could stay in their houses by paying market rent, thus preventing foreclosures and getting out of mortgages they couldn't afford. Mortgage holders, too, would benefit.

Why don't you talk to Baker about this. It's late for his fix to help, but not too late.

Other plans seem to be predicated on the idea of stopping the fall in house prices, which is another way of saying preventing the price bubble from entirely deflating.

Baker and others, including the preceptive Calculated Risk, don't think the bubble can be prevented from deflating completely, nor should it be.

--"[A]n actually interesting idea to do something about the foreclosure crisis."--

I still wonder how Klein differentiates between actually interesting ideas and interesting ones.

But, on the mortgage front, there are still no free lunches, no matter how actually interested Klein thinks others ought to be. Yalamanchili wants the banks to write off their future earnings, and then enter into silent partnerships (legal strings unspecified, and likely, completely unconsidered) with people who will then have that much less incentive to maintain properties, etc.

You clowns can't beat the laws of economics. You can try all you want. You can clown it up as complicated as you can, but you can't change the facts about money paid, value, demand, and the rest of it. You can't legislate value.

Anybody who uses the basic math and logic challenged Megan McArdle as proof of their side in an arguement pretty much loses by default. In fact, I'm still confused why you, Yglesias, Drum and other keep responding to her inane, confused rantings.

So, Mr. Klein, do you agree with Mr. Feldstein's conclusion that the government needs to reduce it's deficits, as the low national savings rate (a result from large govt spending) will increase emphasis on how dependent the US is on capital inflows?

Or should we be following the Keynesian prescription of increasing government spending to get this economy back to full employment.

Or maybe both issues are not as connected as they seem? The latter is definitely a short term prescription, maybe Mr. Feldstein's conclusions are a long run deduction? Even so, at what point should we decide 'enough is enough' with the deficit?

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